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Category: News This Week

  • Philippines: Illicit Trade Hurting Everyone

    Philippines: Illicit Trade Hurting Everyone

    The Senate Committee on Ways and Means said illicit trade has been a major factor in the rise of smoking prevalence in the Philippines and a drop in revenue from excise taxes on tobacco products.

    According to a survey by the Food and Nutrition Research Institute, smoking prevalence in the country rose from 14% in 2021 to 18% in 2023.

    “For almost six years, we reduced smoking prevalence, but in just two years, we’re back to square one,” Senator Sherwin Gatchalian said during the public hearing.

    Meanwhile, revenue from tobacco excise taxes fell from a peak of PHP176 billion (USD$3 billion) in 2021 to PHP134 billion (USD$2.3) in 2023.

    Gatchalian, who chairs the panel, attributed this to a rise in illicit trade, with data from Kantar showing illegal cigarettes now account for 16% of the market, up from 5% in 2021.

    “Illicit trade undermines our efforts,” he said, underscoring the need to address revenue leakages by curbing illicit trade. “These products evade taxes and make cigarettes more accessible, promoting smoking among our people.”

    Tobacco products are among eight excisable items in the country, along with alcohol, vapor products, petroleum, automobiles, non-essential goods and services, sugar-sweetened beverages, and mineral products.

    The survey also revealed a rise in the use of e-cigarettes among adolescents, with usage skyrocketing from 7.5% in 2021 to 39.9% in 2023.

  • Tobacco Technology Celebrates 50th

    Tobacco Technology Celebrates 50th

    Tobacco Technology, Inc. (TTI), a family-owned and operated company, is proud to announce its 50th anniversary in 2025. Founded in 1975 by Duke Cassels-Smith, the company began as a small operation specializing in the creation of high-quality tobacco flavorings. Today, it is a leading global supplier of flavor products and a key player in multiple industries, including e-liquids, shisha, cigarette, cannabis, cigar, oral tobacco, and nicotine pouches.

    Under the leadership of Duke’s wife, Jeremy Cassels-Smith, and their son, George Cassels-Smith, the company has evolved into a multi-faceted enterprise. From its origins in the United States, TTI has grown to include several key divisions, including E-LiquiTech, Inc. (an e-liquid manufacturing company), Emerald Green Technology, Inc. (focused on flavoring solutions for the cannabis industry), and TTI Flavors in Assisi, Italy (a full-scale flavor manufacturing facility).

    “As we continue to expand our global footprint, we remain steadfast in our commitment to driving growth and innovation within the tobacco industry,” TTI president David Johnson said. “Our strategic investments in the e-liquid and cannabis markets underscore our dedication to staying at the forefront of industry evolution, responding to changing consumer preferences, and opening new avenues for growth. The opening of our state-of-the-art manufacturing facility in Italy will enhance our ability to our global customers with greater efficiency and stability. This marks a significant milestone in our vision to lead on a global scale, delivering value to our customers, partners, and stakeholders around the world.”,

    “Reaching this incredible milestone is a testament to the hard work, vision, and dedication of our team,” said Jeremy Cassels-Smith, chairwoman of Tobacco Technology. “What started as a passion project of my late husband Duke has grown into an international operation, providing exceptional flavoring solutions to the tobacco industry across the globe. We remain committed to innovation and quality, ensuring that our products continue to set industry standards.”

    The company now employs over 100 professionals worldwide who are dedicated to the development, manufacturing, and rigorous quality oversight of the flavors that have made Tobacco Technology, Inc. a trusted name. Their expertise spans tobacco, e-liquids, cannabis, with a wide variety of flavor applications.

    “Our family has always been at the heart of this business, and our team is like an extension of that family,” said George Cassels-Smith, CEO of the company. “As we move forward, we remain focused on the values that have guided us for five decades—integrity, quality, and a commitment to delivering flavors that our customers can depend upon.”

    TTI is also proud to be a leader in sustainability and cutting-edge technology. For example, Its E-LiquiTech division makes completed e-juice formulations for its customers that utilizes pharmaceutical GMP’s and Rockwell automation, incorporating complete track and traceability and closed-loop recycling while receiving a 96th percentile EcoVadis Gold sustainability rating. Perfect every time.

    To mark this momentous occasion, TTI will be hosting a celebratory event with customers, partners, and employees later this year to honor the legacy of its founder, Duke Cassels-Smith, and the company’s ongoing commitment to excellence.

    As Tobacco Technology, Inc. celebrates its 50-year milestone, the company remains steadfast in its mission to provide the highest-quality, most innovative flavor solutions to its global customer base while staying true to the values that have been the foundation of its success. “We appreciate your business that has fueled this growth and we thank you for all your support over the last 50 years.”

  • Regulatory Freeze Pending Review

    Regulatory Freeze Pending Review

    As the Trump Administration digs in, it has called for a regulatory freeze pending review across all agencies, citing five points:

    (1)  Do not propose or issue any rule in any manner, including by sending a rule to the Office of the Federal Register (the “OFR”), until a department or agency head appointed or designated by the President after noon on January 20, 2025, reviews and approves the rule.  

    (2)  Immediately withdraw any rules that have been sent to the OFR but not published in the Federal Register, so that they can be reviewed and approved as described in paragraph 1, subject to the exceptions described in paragraph 1. 

    (3)  Consider postponing for 60 days from the date of this memorandum the effective date for any rules that have been published in the Federal Register, or any rules that have been issued in any manner but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.  

    (4)  Following the postponement described in paragraph 3, no further action needs to be taken for those rules that raise no substantial questions of fact, law, or policy.  For those rules that raise substantial questions of fact, law, or policy, agencies should notify and take further appropriate action in consultation with the OMB Director.

    (5)  Comply in all circumstances with any applicable Executive Orders concerning regulatory management.

    Should actions be identified that were undertaken before noon on January 20, 2025, that frustrate the purpose underlying this memorandum, the administration modify or extend this memorandum, to require that department and agency heads consider taking steps to address those actions.

  • Trump Admin Pauses Federal Health Communications

    Trump Admin Pauses Federal Health Communications

    According to CNN, the Trump administration has directed federal health agencies to pause external communications, such as regular scientific reports, updates to websites, and health advisories, according to sources within the agencies.

    Contributors Brenda Goodman and Meg Tirrell wrote that the initial orders were delivered Tuesday to staff at agencies inside the U.S. Department of Health and Human Services, including to officials at the U.S. Food and Drug Administration, the U.S. Centers for Disease Control and Prevention and National Institutes of Health, according to the Washington Post, which first reported the story.

    The direction came without warning and with little guidance as to what exactly it covered, according to sources inside the affected agencies who asked not to be named because they were not authorized to share the information.

    In a follow-up memo obtained by CNN on Wednesday, Acting Health Secretary Dr. Dorothy Fink provided additional details, including that the directive would be in effect through February 1.

    CNN reported that “The memo told health agency employees to have all documents and communications – including regulations, guidance, notices, social media, websites and press releases – reviewed and approved by a presidential appointee before issuing them. It also directed employees not to participate in any public speaking engagements without approval, and to coordinate with presidential appointees before issuing official correspondence to members of Congress or governors.”

    “As the new Administration considers its plan for managing the federal policy and public communications processes, it is important that the President’s appointees and designees have the opportunity to review and approve any regulations, guidance documents, and other public documents and communications (including social media),” Fink said in the memo.

    The directive also told employees to notify higher-ups of any documents or communications that should be exempt either because they’re required by law or because they’re critical for health, safety or other reasons. Already Wednesday morning, the FDA sent out a communication about a safety warning added to the multiple sclerosis drug glatiramer acetate, which goes by brand names including Copaxone, for a “rare but serious allergic reaction.”

    According to the Washington Post, “The pause on communications includes scientific reports issued by the CDC, known as the Morbidity and Mortality Weekly Report (MMWR); advisories sent out to clinicians on CDC’s health alert network about public health incidents; data updates to the CDC website; and public health data releases from the National Center for Health Statistics, which tracks myriad health trends, including drugoverdose deaths.

    Several health officials said they are wary of any messaging halt after the first Trump administration pushed to tightly control the agencies’ communications during the coronavirus response in 2020. Others, however, suggestedthe move is aimed at helping the newly installed Trump health officials understand the vast flow of information coming out of the agencies. The pause, according to one official who spoke on the condition of anonymity to describe internal agency conversations, “seemed more about letting them catch their breath and know what is going on with regard to” communications.

  • SCOTUS Tapdancing Around Vape-Venue Dispute

    SCOTUS Tapdancing Around Vape-Venue Dispute

    Tobacco and vape manufacturers have had little success battling the Food and Drug Administration (FDA) in the majority of appeals courts around the country. However, one place where they have enjoyed modest success is the Fifth Circuit which is located in Louisiana and also governs Mississippi and Texas, and is widely considered the most conservative court in the country. That so many such cases are ending up in the Fifth Circuit is “forum shopping” and shouldn’t be allowed according to the government, an argument that was presented to the Supreme Court January 21.

    The case revolves around R.J. Reynolds Vapor (RJR), a subsidiary of British American Tobacco, a company based in North Carolina, which has found little success battling the FDA in its home Fourth Circuit. Under the Family Smoking Prevention and Tobacco Control Act, manufacturers must get marketing authorization from the FDA before introducing new tobacco products into interstate commerce, and any appeals must be made in either the plaintiff’s home circuit or the D.C. Circuit. The agency previously denied Reynolds’ authorization for flavored e-cigarette products out of concerns for public health. As such, RJR joined several retailers it supplies in Texas and Mississippi and filed its lawsuit in the friendlier Fifth Circuit, a court that has deviated from seven other circuits including the Fourth Circuit and the D.C. Circuit which upheld the FDA’s bans on flavored e-cigarettes. The FDA argued the venue should be based on the location of manufacturers, not the countless retailers.

    “They have circumvented that ability of a court to identify the most convenient forum,” the government said. “By allowing them to use the tactic that they have used, they can unilaterally send the cases to whichever court they prefer.” 

    Justice Clarence Thomas, a George H.W. Bush appointee, suggesting the government had a bias against the Fifth Circuit, asked, “Does it have anything to do with your not winning in the Fifth Circuit?” 

    The government said more than a dozen e-cigarette companies filed appeals in the Fifth Circuit last year. “In 2024, by our count … about 75% of e-cigarette cases were filed all in the Fifth Circuit, all of them by out-of-circuit applicants trying to use the tactic that was approved in the decision below,” said Vivek Suri, assistant to the solicitor general at the Justice Department. “What’s happening now is all of these applicants, whether they’re in California, Michigan, Ohio, or even China, are going to the Fifth Circuit to sue.”

    “Congress was trying to ensure that these kinds of cases go in certain forums or they’re being litigated all over the country and not just in one place chosen by the defendants,” Justice Ketanji Brown Jackson, a Joe Biden appointee, said, suggesting companies were using loopholes to undermine Congress’ venue limitations.

    Kelsey Reichman, writing for the Courthouse News Service, said, “The high court was skeptical that local retailers should be completely barred from challenging marketing denials keeping flavored vapes off store shelves, but their bigger concern stemmed from the potential ripple effects of the case … concerned that a broad venue ruling in this case could touch hundreds of other statutes.”

    “Some of the amici claim that there are as many as 650 review provisions that are similar to the one here,” Justice Samuel Alito, a George W. Bush appointee, said. “Can you tell us how many of those would be subject to the limitation that you just set out?” 

    The government suggested a narrow ruling limited to the Tobacco Control Act. By the end of the argument session, this seemed to be the most likely resolution to the dispute, Reichman said. 

    However, some of the justices questioned whether this was solving the government’s actual complaint. Justice Neil Gorsuch, a Donald Trump appointee, said even if the court prohibited companies from piggybacking on retailer lawsuits, manufacturers could use other tactics to put cases before their preferred court.  

    “What would stop manufacturers from simply funding retailer suits?” Gorsuch asked. “We’d end up in exactly the same place. Third-party funded litigation is not unknown in this country.” 

  • KT&G Opens Expanded Plant in Turkiye

    KT&G Opens Expanded Plant in Turkiye

    South Korea’s leading tobacco company, KT&G, announced the completion of additional manufacturing facilities in Turkiye as part of a strategy to solidify its position as a global top-tier company. This is part of the company’s 2023 initiative to increase global sales by 50%.

    The expansion in Turkiye added two new production facilities to the factory, increasing its total ground area by approximately 50% to 25,000 square meters. With the upgrades, the company’s four facilities can now produce up to 12 billion cigarettes annually, enabling KT&G to meet growing demand in North Africa and Latin America.

    “By strengthening our production capabilities in Turkiye, we are taking significant steps toward becoming an unmatched global leader,” KT&G’s CEO Bang Kyung-man said in a statement. “We will continue to focus on our three core businesses while enhancing our competitive edge.”

    KT&G has been expanding its global footprint since establishing its first overseas factory in Turkiye in 2008. The company is currently working on additional projects, including new factories in Indonesia and a facility in Kazakhstan, set to be completed this year.

  • Bullish on BAT

    Bullish on BAT

    “British American Tobacco (BAT), trading at €35.14 per share with a market cap of €77.45 billion and a 7.97% dividend yield, presents a compelling case for income-focused investors,” Ricardo Pillai wrote for Yahoo! Finance. “Despite modest growth expectations and ongoing regulatory risks, BAT’s strong cash flow, leadership in emerging categories like vapor and modern oral products, and attractive valuation make it an appealing defensive play. The stock trades at a forward P/E of approximately 7x, significantly discounted compared to peers like Philip Morris (PMI) and Altria, signaling potential undervaluation for a company with consistent earnings and robust dividend sustainability.”

    Pillai said BAT’s strategy was to reduce dependance on combustible products, and pivot to being 50% smokeless by 2035. Its Vuse brand e-cigarette holds 40.3% value share of top markets, and is making strides with Velo in the modern oral market. Analysts are bullish on BAT’s future because it appears to be striking a middle ground that investors seek in terms of products and markets.

    “The overarching investment thesis hinges on BAT’s ability to accelerate growth in new categories at a pace exceeding the decline of its smoke products,” Pillai said. “While the strategy is ambitious, its execution thus far has been promising. For investors seeking a reliable dividend stock with modest growth potential, BAT offers a stable and defensive portfolio addition. With regulatory challenges already factored into its valuation, the next financial release will be pivotal in confirming its strategic trajectory. BAT remains a ‘Buy for Income,’ not a growth play, but a compelling option for those prioritizing steady returns.”

  • PMI Considers Expansion in Egypt

    PMI Considers Expansion in Egypt

    Philip Morris International (PMI) has enjoyed success in Egypt with its IQOS heated tobacco product and is looking to expand to other smoke-free products in the market, said Tommaso Di Giovanni, vice president for International Communication and Engagement at PMI. With an estimated 15 million adult smokers in the country, IQOS has already made significant progress in providing a reduced-risk alternative to traditional cigarettes.

     “We were—and we are—selling a product that causes diseases and is addictive: cigarettes,” Di Giovanni said. “Anyone who sells a product that causes disease and is addictive would like to do better,” stressing PMI’s dual responsibility to society and to the company itself.

    He further emphasized that improving the health of adult smokers is not only a moral obligation but also a sound business strategy. “It’s a win-win for our company and for public health,” he explained, adding that addressing societal concerns can help PMI stay ahead of the competition while positively impacting global health.

    “For us, the first goal of sustainability is to address the public health issues posed by cigarettes. The ultimate goal is to offer a portfolio of products that meets the diverse needs of the market while supporting sustainability goals.”

  • FDA Tobacco Case Heads to Supreme Court

    FDA Tobacco Case Heads to Supreme Court

    The Supreme Court will hear oral arguments on Tuesday in a clash between RJR Vapor and the U.S. Food and Drug Administration (FDA) centered around the rules in which the FDA can be challenged in court. The FDA argues that the Tobacco Control Act allows cases to be argued in one of three areas: in the D.C. Circuit, in the place where the plaintiff resides, or in the place where it has its principal place of business. RJR Vapor, a subsidiary of British American Tobacco based in North Carolina, however, is trying to challenge the FDA in the conservative U.S. Court of Appeals 5th Circuit based in Louisiana.

    RJR Vapor filed a petition for review along with Avail Vapor, a Texas retailer, and by a trade association for Mississippi gas stations and convenience stores that sell RJR Vapor’s products— states that reside in the 5th Circuit. RJR’s North Carolina home resides in the 4th Circuit, which had previously turned their appeal against the FDA denial of applications aside. The 5th Circuit, however, previously ruled against the FDA denials, saying the government agency was sending companies on “a wild goose chase.”

    RJR Vapor and the retailers argue the law states “any person adversely affected” can challenge the FDA, to include retailers within the 5th Circuit trying to sell RJR Vapor’s popular menthol-flavored Vuse brand e-cigarettes who could potentially go out of business. In 2016, the FDA rejected RJR Vapor’s application, saying the product would not be “appropriate for the protection of the public health.”

    The FDA argues that its rulings are “always or nearly always” regulating the manufacturer and that any effects on retailers are indirect and thus irrelevant, and that allowing this case in the 5th Circuit would allow “ready evasion” and create incentives for “forum-shopping.” The FDA contends the stakes are high in this case, as the 5th Circuit’s previous ruling would allow manufacturers to get around federal restrictions and cherry-pick the courts where its cases would be heard.

    The FDA approached the Supreme Court, and in October 2024, it agreed to hear the case. RJR Vapor argues the Supreme Court doesn’t have the authority to rule over “non-final” cases like this one to begin with, and wants the case dismissed without decision.

  • PMI Expands in Medical Cannabis

    PMI Expands in Medical Cannabis

    At the end of last week, Avicanna Inc., a commercial-stage, international biopharmaceutical company based in Canada, announced a “scientific and medical affairs” collaboration agreement with Vectura Fertin Pharma, a subsidiary of Philip Morris International (PMI). Avicanna, who specializes in cannabinoid-based medicine, has a clinical R&D department that has led to the commercialization of more than 30 proprietary, evidence-based finished products.

    The two companies formed a Scientific and Medical Affairs Committee that will focus on improving the understanding of medical cannabis access and applications in Canada.

    “PMI has consistently shown interest in the medical side of cannabis,” Aaron Grey, managing director at Alliance Global Partners, an investment firm highly active in the cannabis space, told Forbes. “Their 2016 investment in Syqe Medical was medical-focused, and this Avicanna partnership continues in that vein. PMI’s public-facing interest in cannabis has been more about the medical side than recreational or consumer products.

    “I think this is a multi-decade strategy. Usage trends among young adults are shifting—they’re moving away from tobacco and alcohol and toward cannabis. Big Tobacco sees this and wants to capture that new, growing consumer base. Companies like British American Tobacco have divisions like ‘Beyond Nicotine’ to address these trends, and cannabis is part of that vision. This isn’t just about hedging; it’s about preparing for a long-term consumer shift.”

    Forbes’ Javier Hasse wrote that PMI’s entry into Canada’s well-regulated cannabis market gives it a strategic testing ground with an eye on the U.S. market.

    “For big tobacco in general, most of the major players have made investments in cannabis,” said Grey. “For example, Altria invested $1.8 billion in Cronos Group, and Imperial Brands invested CAD 125 million in Auxly. In November 2023, BAT invested CAD 125 million in Organigram, forming an investment pool and an R&D partnership. These are all ways Big Tobacco is exploring the cannabis space, and I see PMI’s partnership with Avicanna as part of that broader trend.”